About Buyer Representation Agreements
What You Need to Know
Many of the services offered by Portcullis Realty are structured to maximize the benefits to the Seller and are based on the little publicized fact that the Seller is not obligated to pay additional fees, such as a commission, to a Buyer’s Agent. A Buyer's Agent, also known as Buyer's Broker or Cooperating Broker is a person or firm representing the Buyer. Therefore, this Agent's primary allegiance is to the Buyer, not the Seller.
A Buyer Representation Agreement is a written agreement between the Buyer and the Buyer's Agent, outlining the relationship between the two parties and the manner in which the Buyer's Agent will be compensated.
Like a listing agreement with Sellers, Buyer Representation Agreements have a starting and ending date, a description of the duties and obligations of the parties, as well details that specify how the Buyer's Agent is to be paid. Note: the Seller is under no obligation to pay any commission to the Buyer’s Agent.
When entering into these representation agreements, Buyers should be aware of these important points:
- the agreement is structured where the Buyer agrees to pay their Realtor (Buyer’s Agent) a fee/commission.
- further, the Buyer agrees that their Agent (Buyer’s Agent) can seek a fee from the Seller (ie the Seller would pay the Buyer’s Agent the commission, which relieves the Buyer of an obligation to pay the Buyer’s Agent.)
- the Buyer will agree to pay any shortfall to the Buyer’s Agent. For instance, the Seller may agree to pay a 1.75% commission, leaving the Buyer to pay the Buyer’s Agent the remaining .75% of the commission.
- lastly, the Buyer agrees to pay the Buyer’s Agent an agreed upon fee should a firm transaction which is pending closing (“sale of the home”) not close (“sell”) through any fault of the Buyer.
These are examples of duties and obligations found in a typical Buyer Representation Agreement. Of course each agreement may be structured differently, based on the relationship between the Buyer and the Buyer’s Agent (for example, a Buyer’s Agent can choose to waive a portion of their commission at their discretion).
At Portcullis Realty Corporation, we work with our Sellers to ensure they are well informed about Buyer Representation Agreements and the role they play in each of our Service Packages. Buyer Agency is an important consideration when deciding on the best way to market your home for sale.